Startup hopes to hack the immigration system with a floating incubator

American immigration law makes it difficult for foreigners to found businesses …

Some of the Silicon Valley's most important companies, including Intel, Google, and Yahoo, were cofounded by immigrants. Yet America's creaky immigration system makes it difficult for talented young people born outside of the United States to come to the Bay Area. There have been various proposals to make it easier for immigrant entrepreneurs to come to the United States, but they've made no progress in Congress.

So a new company called Blueseed is seeking to bypass the political process and solve the problem directly. Blueseed plans to buy a ship and turn it into a floating incubator anchored in international waters off the coast of California.

Ars talked to Blueseed founder Max Marty. He acknowledged that it would be better for America to reform immigration laws and thereby make his company unnecessary. But in the meantime, Marty and his team are hard at work tackling the practical obstacles to making their vision of a floating, year-round hack-a-thon a reality. Within the next year, they're hoping to raise a venture capital round large enough to lease or buy a ship with space for around a thousand passengers. If Blueseed's audacious hack of the immigration system is successful, it will not only open up Silicon Valley to a broader range of entrepreneurs, it will also shine a spotlight on the barriers American law places in the way of immigrants seeking to start businesses in the United States.

For everything else there's the B-1 visa

Blueseed is trying to overcome the limitations of American immigration law, but its business model also depends crucially on the goodwill of American immigration officials. That's because a key part of the Blueseed sales pitch is that residents will be able to make regular trips to the mainland.

Immigration law makes it difficult for many would-be immigrants to get permission to work in the United States. For example, there's an annual cap on the number of H1-B visas available for American employers to hire skilled immigrant workers. However, permission to travel to the United States for business or tourism is much easier to get.

Max Marty

Blueseed

Marty pointed to the B-1 business visa as a key part of his company's strategy. With a B-1 visa, visitors can freely travel to the United States for meetings, conferences, and even training seminars. B-1 visas are relatively easy to get, and can be valid for as long as 10 years.

Blueseed plans to provide regular ferry service between the ship to the United States. While Blueseed residents would need to do their actual work—such as writing code—on the ship, Marty envisions them making regular trips to Silicon Valley to meet with clients, investors, and business partners.

With the ship only 12 miles offshore, it should be practical to make a day trip to the mainland and return in the evening. A B-1 visa also permits overnight stays.

"A little bit of uncertainty every time"

Ars asked Greg Siskind, an immigration attorney with a national employment practice, to evaluate Blueseed's legal strategy. "What they're proposing seems consistent with the law," he told us. "They rightly have bypassed the most difficult part of the process, which is getting a work visa to come to the US. By moving all of the productive work offshore, it increases the odds that people will be able to do business in Silicon Valley."

But he said the uncertainties of the immigration system could cause headaches for Blueseed residents. One source of uncertainty is in getting the B-1 visa in the first place—though potential entrepreneurs should be able to get that sorted out before moving to the ship. The more serious problem is the risk of being turned away during each trip from the boat to California.

There will be "a little bit of uncertainty every time they come in," Siskind said. Each trip to the mainland would require an inspection by an immigration official who would have discretion to decide who to let into the country. "Depending on what that person had for breakfast may determine the future of your business," he said.

However, Siskind said that the political environment has gotten better for a project like Blueseed. Entrepreneurs are popular among voters, and Siskind says that immigration officials have been "somewhat on the defensive" due to a perception that the immigration system is insufficiently welcoming of potential job-creators. "I think they'll be the poster child to demonstrate what's wrong with the system," he said, which would make immigration officials reluctant to give Blueseed residents too much trouble when they arrive on American soil for business meetings.

Marty tells us that getting permission to enter the United States permanently becomes much easier once a firm grows. "If you have a $5 million-10 million company, there are several avenues and channels you can use to be in the country," he said. So the Blueseed ship would provide temporary lodgings until a startup grew large enough to move to the mainland.

Seasteading light

Marty met his cofounder, Dario Mutabdzija when both were employees of the Seasteading Institute, a nonprofit we covered back in 2008. The Institute promotes a long-term vision of autonomous floating city-states on the open ocean. Institute founder Patri Friedman hopes that the emergence of seasteads could make it possible for people to experiment with new political systems.

Obviously, it's a grandiose vision, and the handful of past efforts to create new nations at sea have been unsuccessful. We asked Marty what makes his company different.

"A lot of seasteading projects in the past lacked a business model that made what they're doing work," he said. "We're solving a very specific and very big problem."

He also expressed a desire to avoid antagonizing the US government. Some past seasteading proposals involved activities, such as gambling and prostitution, that are not permitted in most of the United States and "would not be seen favorably" here. Marty says Blueseed will be different, and will discourage such activities from occurring onboard. "Everyone who comes on board will have to be checked," he said. "There are certain things we don't want on board." He hopes that such policies will earn the company goodwill with government officials and help with any immigration issues that may arise.

Bootstrapping

Of course, none of these concerns will matter if Blueseed can't get its unusually ambitious business plan off the ground. A typical Silicon Valley startup needs an office, servers, and enough capital to pay salaries for a handful of employees until the company's product gains traction. Blueseed will need a lot more than that before it gets its first paying customer.

The firm is currently conducting an environmental impact study. When that's completed, the firm will need to acquire or lease a large ship. Then they'll need to retrofit it for use as a floating apartment and office complex. They'll need to hire a crew with a variety of skills—cooks, doctors, psychologists, lawyers, security officers, and many more. The company estimates they'll need 200-300 crew members in total.

Planned Blueseed location

Blueseed

The firm must arrange for regular ferry service; it hopes to offer two or three trips per day. And obviously, Internet service will be essential. They're still researching options, but the tentative plan is for a high-speed fixed wireless connection with a satellite backup.

Then they'll need to attract paying customers. Marty envisions the Blueseed ship as a floating incubator. They'll charge rent, but also take a small equity stake in each startup that comes on board. He hopes to cultivate a network of investors to help identify promising entrepreneurs. Blueseed will also accept applications directly from would-be entrepreneurs. Marty says they've already had expressions of interest from around the world.

The firm will also need considerable legal advice to navigate these uncharted waters of immigration law. Blueseed has already begun consulting with a few immigration attorneys as they plan their venture (the lawyers they're working with get high marks from Siskind) but they'll presumably need a small army of legal advisors to advise hundreds of would-be entrepreneurs as they make plans to join the vessel. It's likely the firm will need the services of lobbyists and PR professionals to make sure it stays on the US government's good side.

Needless to say, this is too much for Blueseed's three-member staff to handle by itself. Marty says the company plans to delegate as much of the work as possible to more knowledgeable third parties. He plans to draw heavily on established maritime firms to handle the logistical details.

"There are people out there who do the management and operations of maritime businesses," Marty said. "They manage bringing in supplies. They'll even manage the cooking staff on board, manage the maintenance of the ship, and insurance issues."

Blueseed estimates that rents will range from $1,200 per month for the smallest rooms to $3,000 for the largest—figures Marty says are comparable to what entrepreneurs would pay for an apartment and office in Silicon Valley.

"A real shame"

Blueseed's business model seems like a long shot. Buying, outfitting, staffing, and filling a 1,000-person ship seems like a tall order for even the most talented three-person team. But most startups are long shots, and we'd love to be proven wrong.

Still, Siskind argues the real problem is that such a project is even necessary. He believes that our immigration system has been costing Americans jobs for years. He pointed to Microsoft's decision to open a new Vancouver office in 2007 as an example. He said the decision to open the facility, which could eventually have as many as 5,000 employees, was motivated by the difficulty of getting visas for foreign workers.

"They chose Vancouver because they wanted to be relatively close to Seattle," Siskind says. The decision to locate in Vancouver "was a real shame because out of those 5,000 jobs, at least 4,000 were going to be for American workers." Now most of those jobs will go to Canadians, and Microsoft will be able to bring in non-Canadian workers under Canada's less onerous immigration system.

Whether it succeeds or not, Blueseed is going to spark a conversation about America's flawed immigration system. Perhaps a decade from now, international waters near the California coastline will be dotted with floating incubators. But we'd rather see Congress put Blueseed out of business by allowing anyone who wants to start a business in Silicon Valley to do so.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

131 Reader Comments

With the ship only 12 miles offshore, it should be practical to make a day trip to the mainland and return in the evening. A B-1 visa also permits overnight stays.

12 miles? Wouldn't they have to be outside the 200 mile economic zone? Apparently not, but I'd think that being inside that zone would still create problems - if the government wanted to take them on (basically by passing a low saying that this is illegal). Being forced outside of 200 miles would make the 'commute' for meetings uneconomical (too long by boat - too expensive by helicopter).

The downside, no protections from governments or law enforcement in terms of immediate response for help if something happens. Pirates are not an unknown thing on the high seas, what a tempting target for a terrorist group - 1000 entrepreneurs, and 200-300 crew memebrs, all located in one place just outside jurisdictional waters.

The downside, no protections from governments or law enforcement in terms of immediate response for help if something happens. Pirates are not an unknown thing on the high seas, what a tempting target for a terrorist group - 1000 business leaders of U.S. businesses, and 200-300 crew memebrs, all located in one place just outside jurisdictional waters.

There is no danger near the US. Pirates are generally very short range.

Immigration laws aren't the only ones in need of reform. It's also time to lose the rampant border paranoia. I know people (in Canada) who can't even visit the US because they were caught with a joint 20 years ago. They're simply turned around at the border. Ridiculous.

Having lived on boats for some years I'd just as soon pass. One gets real 'effing bored really 'effen quick. Also, is one's family living on the boat too? Even with regular trips going ashore life would descend into madness quickly. Or at least with my wife and kids anyway.

With the ship only 12 miles offshore, it should be practical to make a day trip to the mainland and return in the evening. A B-1 visa also permits overnight stays.

12 miles? Wouldn't they have to be outside the 200 mile economic zone? Apparently not, but I'd think that being inside that zone would still create problems - if the government wanted to take them on (basically by passing a low saying that this is illegal). Being forced outside of 200 miles would make the 'commute' for meetings uneconomical (too long by boat - too expensive by helicopter).

I haven't seen this mentioned in a while, but I think the 200 mile economic zone applies to exploration and use of marine resources, including production of energy from water and wind, and normal national defense operations and the 12 mile limit is the legal jurisdiction for businesses and everything else.

This is a completely delusional idea. For starters, costs of living on a cruise ship would be far beyond anything a typical startup could budget for. You may be better off flying in and out of San Francisco for meetings and doing your work on the airplane, as it is normally done. Secondly, 12 miles off the coast is open northern Pacific ocean, hardly a comfortable environment, exposed to every weather system from Alaska and south Pacific. It would be impossible to offer any kind of reliable ferry service to the coast.

The downside, no protections from governments or law enforcement in terms of immediate response for help if something happens. Pirates are not an unknown thing on the high seas, what a tempting target for a terrorist group - 1000 business leaders of U.S. businesses, and 200-300 crew memebrs, all located in one place just outside jurisdictional waters.

There is no danger near the US. Pirates are generally very short range.

The downside, no protections from governments or law enforcement in terms of immediate response for help if something happens. Pirates are not an unknown thing on the high seas, what a tempting target for a terrorist group - 1000 entrepreneurs, and 200-300 crew memebrs, all located in one place just outside jurisdictional waters.

I'm having a hard time picturing pirates off the coast of California... East Africa, sure, but California? Ideally this ship should be running under the American flag, and then - afaik - it also falls under US jurisdiction and law enforcement.

But besides these hypothetical technicalities: I really think that immigration law could use a bit of dusting-off and some adjustments. For example, foreign nationals who have completed education or training in the US could have a e.g. 2 year post-graduation work permit that would allow them to seek employment or start up their own companies. After all, it occurs to me that most of the Silicon Valley startups are run by people who actually went to American universities. From my personal experience, the US is doing a lot right in attracting talent, but things seem to start going wrong when it comes to retaining these people. Who often, especially at the post-graduate/post-doctoral level, receive funding from US taxpayers (through NIH/NSF etc) - what a waste to essentially force many of these people to go somewhere else after they have received additional training and made important contributions to R&D.

I'm having a hard time picturing pirates off the coast of California... East Africa, sure, but California? Ideally this ship should be running under the American flag, and then - afaik - it also falls under US jurisdiction and law enforcement.

They told me they'll likely adopt a non-American flag of convenience, probably from a small country with a decent legal system like the Bahamas.

I'm having a hard time picturing pirates off the coast of California... East Africa, sure, but California? Ideally this ship should be running under the American flag, and then - afaik - it also falls under US jurisdiction and law enforcement.

They told me they'll likely adopt a non-American flag of convenience, probably from a small country with a decent legal system like the Bahamas.

Regardless of the flag - acts of Piracy within 200 miles of the coast will still be responded to by the US Navy/Coast Guard (whichever is closer).

Interestingly enough, there are poker havens in the Caribbean with brokers to assist pros in all the documentation needed to move to one already in place. That idea has been around for a few years now in practice.

What's the trip time on land to Silicon Valley after the ferry drop them off? The map make it looks like they are planning for a Santa Cruz drop off. Depends on the traffic on Highway 17, and where they are going in Silicon Valley, it can take anywhere between 45 minutes to 2 hours(extreme case, I know. But I had seen it happens).

you know your real estate market is broken when living on a boat 12 miles offshore costs the same as renting an apartment and office.

I had the same thought but I wonder how comparable the 2 situations truly are. Aside from the boat trips needed, ships are usually lacking in space compared to a condo or house, let alone an office. That also doesn't deal with the floating bacteriological incubator side of things. They'll need to have stringent protocols in order to avoid issues with that.

Some past seasteading proposals involved activities, such as gambling and prostitution... Blueseed will be different, and will discourage such activities from occurring onboard. "Everyone who comes on board will have to be checked," he said. "There are certain things we don't want on board."

Okay, maybe that lame gesture will appease the SoCons who represent the xenophobe lobby but what will you give the labor unions to keep your little venture from being regulated to death?

It would be terrible if something bad happened to one of these ships. If it should, by some freakish chance, have catastrophic failure of hull integrity and sink. Yes, that would be really, really, really horrible. And the water off the coast of SF is cold, so very, very cold.

I guess poor illegals just sneak across the border, while high tech illegals get ships anchored just off our waters so as to appear "legal". How truly *wonderful*.

As a business with offices on the ship you can only hire people:* That are seaworthy at any condition?* Willing to have no social life and/or no family?* Are willing to eat what ever gets shipped on board and pay the prices that come with it?* Are willing to accept limited/sub standard medical care?* Are willing to work under Bahama's laws and to have likely no health insurance, no benefits, certainly no US social security or US unemployment taxes paid? Or does the incubator have shell addresses on Californian soil with letter boxes (little Bahama in San Francisco)?

If I make a simple comparison to other jobs offered under such conditions, they are usually paid at wage levels much higher then comparable work on land and generally structured in a way so people life only for compressed hard working periods on such off shore platforms. I'd think that wage costs for such a startup would be rather expensive.

In my opinion running a business on the ship does make little sense, because the costs look prohibitively high. However it might be lucrative to hire talent that is willing to work for what ever is left over after the extra cost is deducted from their wages for a comparable on land job (and may be even less). In any case I'd expect that turn over will be high, so not a good long term investment.

Another interesting question is where is Blueseed itself registered? Where does it pay its taxes?

It's unbelievable that the immigration laws are so bad that a company like this could even theoretically exist. Yet, that is the world we live in today. I have experienced this first hand: a Swedish friend and I have wanted to start a company here in the US for several years, but getting him an H1B visa is quite difficult.

The US limits the total number of H1B visas given per year and the demand is so high that the cap is normally hit the very first day that applications are open. Getting approved is based on luck and if anything goes wrong, you have to wait another year before you can reapply. It's ridiculous that the US has gone to such great lengths to keep valuable, highly educated workers out of our country.

I wish Blueseed the best of luck; I may need their services in the coming years.

The downside, no protections from governments or law enforcement in terms of immediate response for help if something happens. Pirates are not an unknown thing on the high seas, what a tempting target for a terrorist group - 1000 entrepreneurs, and 200-300 crew memebrs, all located in one place just outside jurisdictional waters.

I'm having a hard time picturing pirates off the coast of California... East Africa, sure, but California? Ideally this ship should be running under the American flag, and then - afaik - it also falls under US jurisdiction and law enforcement.

But besides these hypothetical technicalities: I really think that immigration law could use a bit of dusting-off and some adjustments. For example, foreign nationals who have completed education or training in the US could have a e.g. 2 year post-graduation work permit that would allow them to seek employment or start up their own companies. After all, it occurs to me that most of the Silicon Valley startups are run by people who actually went to American universities. From my personal experience, the US is doing a lot right in attracting talent, but things seem to start going wrong when it comes to retaining these people. Who often, especially at the post-graduate/post-doctoral level, receive funding from US taxpayers (through NIH/NSF etc) - what a waste to essentially force many of these people to go somewhere else after they have received additional training and made important contributions to R&D.

Maybe not the modern day Somilia type of pirates, but maritime piracy, according to the United Nations Convention on the Law of the Sea of 1982, consists of any criminal acts of violence, detention, rape, or depredation committed for private ends by the crew or the passengers of a private ship or aircraft that is directed on the high seas against another ship, aircraft, or against persons or property on board a ship or aircraft. Piracy can also be committed against a ship, aircraft, persons, or property in a place outside the jurisdiction of any state.

1000 plus hostages all in one place to hold for ransom is an attractive target, regardless if you call them pirates or not.

hypothetical? not really, terrorist groups are always looking for such ripe opportunity, its not hypothetical at all, its a real possibility. People thought the twin towers being taken down was hypothetical too, but on 911 the terrorist thought different and they exploted that opportunity for the biggest shock value and inducing the biggest amount of terror that shook the foundations of what we thought we knew because no one though it was possible. hypothetical? Nope, its only hypothetical to assume that it can't happen, and now here we are with 1000 plus people on a ship, in one place, basically isolated, and although it could happen anywhere, the terrorist go for the greatest shock value and attacking 1000 plus people from different nations all at once is definately a shock value target.

As nice and warm and fuzzy as it sounds in concept, this is a really bad idea.

12 miles out in the Pacific Ocean...I can think of no commute more fun than that. Having sailed the coast for a number of years I can say that maybe Max should go hang out there for a couple of weeks to see if he can handle it. One night of rough seas should do the trick :)

They should get a decommissioned aircraft carrier and lash a bunch of old cargo ships and tankers to it. They can call it The Raft.

Ha, I was just going to post that this sounds like something out of a Stephenson novel.

It seems to me that the time/money spent to pull something like this off would be better spent in next-gen videoconferencing research. Obviate the need to be physically present, and then you don't have to worry about borders at all.

Anyone who has been educated in the US and hasn't committed a felony should be given a green card. No exceptions. Our economy cannot afford to lose these hard working people especially when we have China to compete with.

So many bright intelligent people come here for the opportunity which is paid for by American citizens. Then we send these people back or force them into marginal jobs because of xenophobia. Its pathetic.

the public's discussion complete focus on illegal migrant farmers sneaking across the southern boarder is a waste of time. It distracts the lawmakers from the far more important issues facing our system of immigration.